Jobs outlook strongest since 2007 as economists forecast figures will show employment at new record high

An increasing number of employers are planning to hire staff, a report published today has found with the jobs outlook at its strongest level since the recession.

Recruitment specialists Manpower said hiring intentions in Scotland, in particular, were at a seven-year high despite uncertainty being expressed in some quarters about which way the country will vote on the upcoming referendum on independence.

Manpower surveyed more than 2,000 firms and found that optimism on jobs was also being expressed in the public sector, which has been hit by spending cuts and wages freezes since 2010.

Unemployment fall: Economists expect the number of people who claimed Jobseekers' Allowance in May to have fallen again.

Hiring confidence in the public sector has risen more sharply than in private firms, the employment group said.

Mark Cahill, managing director of Manpower, said: ‘Consistency has been the byword for the UK's employment outlook over the last 18 months. While job prospects have been strong, it's only now that we're seeing a return to pre-recession hiring plans.

‘We're seeing broad-based growth across permanent roles, the self-employed and contractors,’ he added.

The survey comes ahead of official UK employment figures tomorrow.

Economists expect the Office of National Statistics data will show unemployment falling by 146,000 to 2.180 million in the three months to April. And they expect the claimant count for Jobseekers' Allowance in May will fall by 27,000.

They also forecast the unemployment rate would fall to 6.7 per cent in the three months to April, while 290,000 jobs are expected to have been created in the quarter, taking the employment number to a record high of 30.480 million.

Unemployment has been falling consistently for the past year and at 6.7 per cent would be well below the 7 per cent threshold that the Bank of England said in August last year could trigger an increase in interest rates.

The economy has improved, and with it the job prospects of thousands of people, far more quickly than Bank policymakers anticipated last summer.

But Howard Archer chief UK and European economist at IHS Global Insight said while a fall in the unemployment rate would add to mounting expectations that the Bank would start to rise interest rates early on in 2015 or even in late-2014, it was only one factor that policymakers would take into consideration.

Last week Christine Lagradere, managing director of the International Monetary Fund, said the BoE should be prepared to raise interest rates quickly should policy levers to stop the housing market overheating fail.

She warned accelerating house prices and underinvestment by businesses posed the two greatest threats to Britain’s strengthening economic recovery.

Mr Archer said he was lowering his
forecast for the unemployment rate to 6.2 per cent by the end of 2014
and to 5.9 per cent by the end of 2015.

However he anticipated that UK employment growth ‘will increasingly be limited by improving productivity as many companies are able to make greater use of the workers they already have.

‘It is also notable that there are a large number of people who are working part-time, who would like to work longer hours,’ Archer said.

‘It may also be that a significant number of more confident companies have been taking on workers earlier than they really need them – in belief that the UK really is now set for a period of sustained, healthy growth, and to ensure that they get potentially the best staff available. If this is a significant factor, it would also suggest that the growth in employment will moderate over the coming months.‘